Telekom Austria Reports Q3

Higher wholesale wireline and wireless revenues contributed to 17.5% increase in net income to €98.8M

November 19, 2004

3 Min Read

VIENNA -- Telekom Austria AG (VSE: TKA; NYSE: TKA) today announced its results for the first nine months 2004 ending September 30, 2004.

  • Group revenues increase by 2.7% to EUR 3,031.2 million

  • Group operating income rises by 16.6 % to EUR 414.8 million

  • Consolidated net income increases by 37.0% to EUR 205.2 million

  • Consolidated net debt declines by EUR 565.1 million to EUR 2,072.2 million compared to the end of December 2003

  • Wireline segment benefits from slowing decline in voice and higher wholesale revenues; headcount reduction continues

  • Growth in the wireless segment due to stronger roaming revenues and rising data business

Note: All financial figures are based on U.S. GAAP; if not defined otherwise, all comparisons are given year-on-year

Year-to-date comparison:

During the first nine months 2004 totalgroup revenues increased by 2.7% toEUR 3,031.2 million.
After applying the change in theaccounting for third party value addedservices, which was implemented onOctober 1, 2003 retroactively to 1-9M 03,the increase in group revenues amountsto 4.3%.

Group operating income increased by16.6% to EUR 414.8 million, benefitingfrom a substantial increase in the wirelinesegment and a slight growth in thewireless segment. Group operatingincome before depreciation, amortizationand impairment charges (adjustedEBITDA) rose by 4.2% to EUR 1,253.8million during 1-9M 04.Consolidated net income of TelekomAustria rose by 37.0% to EUR 205.2million.

Quarterly comparison:

Quarterly figures show an increase ingroup revenues by 2.6% to EUR 1,046.2million. Applying the change in the accounting for third party value addedservice revenues implemented on October1, 2003 retroactively to 3Q 03, revenuesincreased by 4.2% during 3Q 04.On that basis wireline revenues rose by1.7% to EUR 546.4 million, primarily dueto higher wholesale revenues.

The increase of wireless revenues by6.4% to EUR 563.9 million, applying thechange in the accounting for third partyvalue added service revenues also to 3Q03, was driven by both the domestic andforeign operations. The businessbenefited from higher subscriber figuresand strong roaming revenues.

Operating income rose by 13.5% to EUR171.8 million during 3Q 04, showing a riseof 77.2% in the wireline and of 3.0% inthe wireless segment.

Operating income before depreciation,amortization and impairment charges(adjusted EBITDA) rose by 5.5% to EUR446.4 million. Rising revenues and lowercosts resulted in a rise in the wirelineadjusted EBITDA by 3.2% to EUR 221.6million and by 8.1% to EUR 224.8 millionin the wirless segment.

Quarterly net income rose by 17.5% toEUR 98.8 million.

Capital expenditures continued to declineand fell by 12.4% to EUR 115.2 millionduring 3Q 04, which together with a risingoperating cash flow led to a decrease innet debt to EUR 2,072.2 million at the endof September 2004.

Reporting changes

In accordance with an Austrian supremecourt ruling, Telekom Austria is no longerconsidered the primary obligor for valueadded services provided to its customersby third parties and ceased reportingrevenues generated by such services on agross basis, beginning on October 1, 2003.This resulted in an equal reduction ofrevenues and costs without any impact onadjusted EBITDA or on operating income.Where necessary for comparativepurposes, data from prior years has beenadjusted in this report.

During 1Q 04, the reporting of capitalexpenditures has been changed fromadditions to property, plant & equipmentto capital expenditures for tangible andintangible assets, as included in “cashused for investing activities” in the cashflow statement.

Telekom Austria AG

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